Dewitt L. Weary, III and Tamarra T. Weary

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF ILLINOIS
In Re 	)
) 	Case No. 	17-30503
DEWITT L. WEARY, III and 	)
TAMARRA T. WEARY, 	)
) 	Chapter 11
Debtors. 	)
Before the Court after trial is FCB Banks’ Motion for Relief from Automatic
Stay and for Abandonment of Property from the Estate to pursue foreclosure of
the post-confirmation note and mortgages in its favor. Because this Court finds
that the automatic stay is no longer in effect, the Motion will be denied as moot.
I. 	Factual Background
The Debtors, DeWitt and Tamarra Weary, filed their voluntary petition
under Chapter 11 on April 3, 2017. On their petition and schedules, the Debtors
identified FCB as a creditor with claims in excess of $1 million secured by
mortgages on their home located at 8 Country Lane in Columbia, Illinois, and a
portfolio of rental income properties in Madison and St. Clair Counties in Illinois.
Specifically, 	on 	their 	Schedule 	D: 	Creditors 	Who 	Have 	Claims 	Secured 	by
Property filed April 17, 2017, the Debtors identified the properties securing FCB’s
claims with the following values: 1424 1st Avenue - $15,000; 1205 North 89th
Street - $15,000; 103-105 Sumner - $100,000; 107-109 Sumner - $100,000;
O P I N I O N
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3602 Falling Springs Road - $45,000; and 8 Country Lane - $350,000. FCB filed
several proofs of claim asserting claims secured by the properties.
The Debtor’s first amended plan of reorganization was filed January 19,
2018. The plan proposed the following treatment for FCB’s secured claim class:
FCB’s liens would continue unimpaired, the Debtors would continue making
monthly adequate protection payments per an order entered earlier in the case,
FCB would receive a pro rata share of quarterly plan distributions from a creditor
fund, FCB would receive its share of proceeds of its collateral, and any collateral
not sold by the final distribution date would be surrendered back to FCB. Any
deficiency at the time of surrender would be treated as a general unsecured
claim.
The plan also provided that “[o]n the Effective Date, all Estate Property . .
. will revest in the Reorganized Debtors and shall be free and clear of all claims
and interests of Creditors and Parties in Interest, except as expressly provided
in this Plan or the Confirmation Order.” “Estate Property” is defined in the plan
as all property of the “Estate” which, in turn, is defined as “the estate created
upon the commencement of the Case pursuant to Code §§541(a) and 1115.”
“Effective Date” is defined in the plan as “the first Business Day following the
day that the Confirmation Order becomes a Final Order.” The plan further
provided:
Pursuant to the provisions of 11 U.S.C. §§105, 524, and 1141(d)
and 	as 	[sic] 	except 	as 	otherwise 	provided 	in 	the 	Plan, 	the
Confirmation Order shall discharge and release, as of the Effective
Date, the Debtors, their estate and all of their respective property
from 	any 	and 	all 	claims, 	debts, 	liens, 	security 	interests,
encumbrances and interests that arose before the Confirmation
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Date, including, but not limited to, all principal and any interest
accrued and debts of any kind specified in 11 U.S.C. §502(g),
502(h), and 502(j) whether or not (a) a proof of claim or interest
based upon such Claim, debt, right or Interest is filed or deemed
filed under 11 U.S.C. §501; (b) a Claim or Interest based upon
such Claim, debt, right or Interest is allowed under 11 U.S.C.
§502[;] or (c) the holder of a Claim, debt, right or Interest accepted
this Plan. In addition, subject to the provisions of this Plan, the
Distributions made under this Plan shall be in exchange for and
in 	compliance 	[sic] 	satisfaction, 	discharge, 	and 	release 	of 	all
claims against the Debtors and any of their respective assets or
property, including claims for interest accruing after the Petition
Date and prior to the Effective Date. On or after the Effective Date,
except as expressly provided in the Plan, all holders of Claims
arising prior to the Confirmation Date shall, to the fullest extent
possible 	under 	applicable 	law, 	be 	permanently 	barred 	and
enjoined from asserting against the Debtors or their assets or
property any further or other claims based on any act or omission,
transactions or other activity of any kind or nature that occurred
prior to the Confirmation Date.
After some negotiation, the Debtors’ first amended plan was confirmed by
order entered June 5, 2018. The confirmation order, however, modified the terms
of the first amended plan, including the treatment of FCB’s claims. Under the
confirmed plan as modified, FCB and the Debtors would execute a new loan and
mortgage package “with a principal balance in the approximate amount of
$1,008,587.22” and monthly payments at a fixed rate of interest for 6 years with
a balloon payment for the balance due upon maturity. The order further provided
that “[i]f each and every term of the above loan is complied with, then when the
above loan matures, [FCB] will renew or extend the above loan fixed for an
additional 7 years at the WSJ prime rate then in effect at a 12 year amortization.”
The final paragraph of the confirmation order also provided that the Debtors
would be responsible for filing “(1) a report with the Court certifying that they
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have complied with the terms and conditions of the Plan (as amended or
modified) and that they are otherwise eligible for a discharge under 11 U.S.C.
§1141(d)(5); (2) a Motion for Entry of Discharge Order; 	and (3) and [sic] an
Application for Final Decree pursuant to Bankruptcy Rule 3022.”
On 	November 	26, 	2018, 	the 	Debtors 	filed 	a 	motion 	for authority 	to
refinance the debt to FCB as contemplated by the order confirming plan. The
motion was granted by order entered December 19, 2018. Four months later, the
Debtors filed a motion to administratively close case, which was docketed as a
motion for final decree. The motion asserted that the confirmed plan had been
“substantially consummated in accordance with 11 U.S.C. §1101(2) and [that]
the estate ha[d] been fully administered, except for the completion of all plan
payments.” The motion asked that an order be entered administratively closing
the case, adding that the “Debtors shall file a motion [to] reopen the case to enter
their discharge order upon completion of payments under the Confirmed Plan.”
On April 30, 2019, the bankruptcy case was closed following a hearing at which
the motion to administratively close case was granted.
The case was reopened for several months in 2021 to resolve a dispute
with the Illinois Department of Revenue before being closed and then reopened
again in late 2024 to deal with substantial settlement funds obtained from
resolution of an employment discrimination claim held by DeWitt Weary. In
connection with the 2024 reopening, the United States Trustee (“UST”) informed
the Court that her office was made aware of the settlement not from the Debtors
but rather from the office of the Illinois Attorney General, prompting the UST’s
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attorney to reach out the Debtor’s attorney in the employment dispute which led
to an agreement not to disburse settlement funds to the Debtors without the
UST’s consent or an order from the bankruptcy court. The motion to reopen was
granted at a hearing held November 14, 2024, with direction that the settlement
funds be held in the Debtors’ bankruptcy attorney’s trust account pending
further order. On January 8, 2025, the UST filed a motion to convert the case to
Chapter 7, raising concerns about the Debtors’ disclosure of the settled cause of
action, use of settlement funds, and compliance with their confirmed plan terms.
On January 14, 2025, the Debtors filed a motion to release operating funds,
seeking authority to use settlement funds to, among other things, pay FCB for
past due installments from October 2024 onward. The motion was granted in
part by order entered January 28, 2025, which authorized the Debtors to use
settlement 	funds 	to 	pay 	FCB 	outstanding 	installments 	due 	for 	October,
November, and December 2024.
On May 22, 2025, FCB filed its Motion for Relief from Automatic Stay and
for Abandonment of Property from the Estate now before the Court. The Motion
seeks relief from stay to pursue foreclosure of mortgaged properties, an order
requiring the Debtors to endorse and deliver to FCB all insurance checks for
application against outstanding debts, and abandonment of the property and
proceeds. FCB contends in the Motion that the Debtors failed to comply with all
terms during the initial 6-year term of the loan contemplated by the order
confirming plan and that FCB was therefore not required to extend the note after
the initial maturity date of January 1, 2025. FCB says that the Debtors are in
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default and that it is not adequately protected, that there is a lack of equity in
the property for the benefit of the estate, and that the property is not necessary
for an effective reorganization.
Thereafter, the Debtors filed a motion and then an amended motion to
modify their confirmed plan, proposing, among other things, to force FCB to
extend the note for an additional term. Notwithstanding their prior assertions in
moving to close their case, the Debtors in their motion to modify contended that
their plan has not been substantially consummated.1 Around that time, the
Debtors also filed a motion seeking recusal of the judge overseeing the case,
resulting in the case being reassigned to the undersigned judge.
A trial on the Motion for Relief from Automatic Stay was held October 22,
2025. At the start of trial, prior to the presentation of evidence, counsel for FCB
raised the issue of whether there was even an automatic stay in effect based on
the post-confirmation status of the case. FCB believed that no stay was in effect
and 	said 	it 	filed 	its 	Motion 	out 	of 	an 	abundance 	of 	caution. 	The 	Court
acknowledged the issue but said it was disinclined to rule on it from the bench.
Rather, the Court intended to proceed with trial on stay relief and take all
matters under advisement. After a brief discussion about the burdens of proof,
FCB with the burden of going forward began its presentation of evidence by
calling the Debtor DeWitt Weary as an adverse witness.
1 A second amended motion to modify was subsequently filed that sought to further modify treatment of FCB and
other creditors.
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Mr. 	Weary 	identified 	the 	post-confirmation 	promissory 	note 	dated
December 27, 2018, signed by himself and Mrs. Weary in favor of FCB, with a
principal balance of $1,030,042.93 and a maturity date of January 1, 2025. Mr.
Weary also acknowledged that the note contemplated as security for the loan
mortgages and assignments of rents in favor of FCB on 1424 1st Avenue, 1205
North 	89th 	Street, 	3602 	Falling 	Springs 	Road, 	103-105 	Sumner, 	107-109
Sumner, and 8 Country Lane. Mr. Weary identified the mortgage documents
executed the same day in favor of FCB relating to the note and properties.
Mr. Weary disagreed with FCB’s attorney’s suggestion that the Debtors
failed to make all monthly payments under the note when they were due but
then conceded that the October, November, and December 2024 payments were
not made at the time they were due. Under questioning from his own attorney,
the Debtor explained that the last three payments for 2024 were ultimately made
per court order entered January 28, 2025, authorizing for such purpose the
release of settlement funds arising from Mr. Weary’s employment discrimination
claim. Mr. Weary said that all payments other than the balloon payment have
now been made and he otherwise complied with all the terms of the note during
the 6-year term.
As to why he was unable to make the October, November, and December
2024 payments when due and had to rely on the settlement funds to complete
the monthly payment obligations after-the-fact, Mr. Weary conceded that he was
in a rough spot at the time. He said that he was facing a rash of vacancies in his
rental 	properties 	while 	also 	trying 	to 	redeem 	other 	property—not 	FCB’s
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collateral—from 	tax 	sale. 	Pressed 	further 	on 	his 	ability 	to 	afford 	the 	loan
installment 	payments, 	the 	Debtor 	acknowledged 	entering 	into 	several
forbearance agreements with FCB during the initial 6-year term. He identified a
Second Amended Agreement to Forbear dated October 29, 2020, under which
FCB agreed to extend deferral of monthly principal and interest payments from
April 1, 2020, through December 1, 2020. Signed by the Debtors, the forbearance
agreement recited the loan balance of $974,653.38 due as of September 30,
2020, the Debtors’ agreement to continue making regularly scheduled escrow
payments 	during 	the 	deferral 	period, 	and 	their 	understanding 	that 	the
forbearance would result in additional interest and a higher balloon payment
than under the original terms of the note. When asked about the reason for the
forbearance agreements, Mr. Weary explained that rental occupancy and rates
suffered in 2020 due to the COVID-19 pandemic which led to the Debtors’
request for forbearance. He said that vacancy rates had since recovered and that
he would be able to afford monthly payments if the loan term were extended.
As to his ability to afford monthly payments going forward which would be
significantly greater under an extended term, the Debtor contended that rental
income would be sufficient to make the required payments and that he could
use the settlement funds as a fallback source of payment. Mr. Weary described
various improvements and repairs he had made or was prepared to make which
he believed increased property values and, in turn, would increase the rental
income 	generated 	by 	the 	properties. 	He 	identified 	Schedule 	D 	filed 	in 	his
bankruptcy case, questioning the accuracy of the values he assigned to the FCB
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properties listed but claiming that, in any event, the properties had increased in
value since the case was filed. Other than his residence which he said was now
worth between $618,000 and $650,000, however, Mr. Weary did not ascribe a
current dollar value to any of the FCB properties.
FCB called one other witness: Edward Kovach, a senior vice president at
FCB covering banks in St. Clair, Monroe, and Madison counties. Mr. Kovach
stated that he does valuations of properties as part of his duties and that he
recently drove by each of the properties at issue in this case in preparation for
trial. Based on what he could see from outside the properties, he approximated
values for the properties equal to or just slightly higher than the values listed on
Schedule D filed at the beginning of the bankruptcy case. Mr. Kovach said that
he heard Mr. Weary’s testimony about the repairs and improvements that had
been made to the properties, but he disagreed about the extent to which they
would add to the property values. On cross-examination, Mr. Kovach agreed that
some of the improvements, if made, would increase property values and rents.
And he agreed that third-party, walk-through appraisals would generally be
more accurate than any drive-by valuation but suggested that his valuation
assumed the interiors of the properties were in good condition.
At the close of testimony, each party presented arguments in favor of their
respective positions. As part of its argument, FCB again contended that the
automatic stay is no longer in effect based on the confirmed plan. The Debtors,
in turn, argued that, although post-confirmation, there is still a stay in effect
because 	the 	confirmed 	plan 	included 	a 	plan 	injunction 	requiring 	FCB 	to
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establish its entitlement to relief in this Court. The parties presented their
respective arguments for and against stay relief under §362(d), and the Court
took the matters under advisement. They are now ready for decision.
II. 	Jurisdiction
This Court has jurisdiction over proceedings “arising under title 11, or
arising in or related to cases under title 11” pursuant to 28 U.S.C. §1334. All
bankruptcy cases and proceedings filed in the Southern District of Illinois have
been referred to the bankruptcy judges. SDIL-LR Br1001.1; see 28 U.S.C.
§157(a). 	Matters 	concerning 	modification 	of 	the 	automatic 	stay 	are 	core
proceedings. 28 U.S.C. §157(b)(2)(G). The issues before the Court arise from the
Debtors’ bankruptcy itself and from the provisions of the Bankruptcy Code and
may therefore be constitutionally decided by a bankruptcy judge. See Stern v.
Marshall, 564 U.S. 462, 499 (2011).
III. 	Legal Analysis
When a bankruptcy petition is filed, it generally operates as a stay of any
action against the debtor or property of the estate. 11 U.S.C. §362(a). So long as
the stay under §362 is in effect, an interested party must obtain relief from the
bankruptcy court to modify the stay so that it may pursue the debtor or property
in a forum other than the bankruptcy court. 11 U.S.C. §362(d). Actions taken
without proper relief from and in violation of the automatic stay are generally
void. See Middle Tenn. News. Co. v. Charnel of Cincinnati, Inc., 250 F.3d 1077,
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1082 (7th Cir. 2001) (citations omitted). But the automatic stay does not last
indefinitely, and, once terminated, no longer bars creditors or other interested
parties from taking actions that would otherwise be prohibited.
At trial, FCB argued that there is no automatic stay in effect in this case
and that the relief it seeks is not necessary; it only filed the Motion out of an
abundance of caution. The Debtors countered that whether the automatic stay
terminated in this case is irrelevant because there is a plan injunction that
requires relief be obtained from this Court. The Court finds that FCB is correct.
The automatic stay terminated by operation of law well before the events giving
rise to FCB’s Motion, and the provisions of the Debtors’ confirmed plan, to the
extent they gave rise to a plan injunction, do not require that relief be obtained
from this Court to enforce any rights or obligations under the plan.
Section 362(c) provides in relevant part that “(1) the stay of an act against
property of the estate under subsection (a) of this section continues until such
property is no longer property of the estate;” and “(2) the stay of any other act
under subsection (a) of this section continues until the earliest of—(A) the time
the case is closed; (B) the time the case is dismissed; or (C) if the case is a case
under chapter 7 of this title concerning an individual or a case under chapter 9,
11, 12, or 13 of this title, the time a discharge is granted or denied[.]” 11 U.S.C.
§362(c)(1)-(2).
Consistent with §1141(b), the Debtors’ plan provided for vesting of the
property of their estate back to them upon the effective date of confirmation.
There is ample authority to support a finding that the automatic stay as against
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property of the Debtors’ estate terminated upon the effective date of confirmation
which was the day after the confirmation order became a final order. See, e.g.,
HSBC Bank USA v. United Air Lines, Inc. (In re UAL Corp.), 360 B.R. 780, 785
(Bankr. N.D. Ill. 2007); In re T.S.P. Indus., 117 B.R. 375, 377 (Bankr. N.D. Ill.
1990). The issue, however, could be debated in individual Chapter 11 cases
which are often compared to Chapter 13 cases, particularly in light of the 2005
addition of §1115 which provides that all postpetition property acquired in
individual Chapter 11 cases up until the time of case closure, dismissal, or
conversion is property of the estate. See In re Rael, 527 B.R. 799 (Table), 2015
WL 847432, at *4-7 (B.A.P. 10th Cir. Feb. 27, 2015); see also Stephen R.
Winship, 	The 	Uncertain 	Status 	of 	the 	Automatic 	Stay 	Postconfirmation 	in
Individual Chapter 11 Cases, 2014 No. 10 N ORTON BANKR . L. ADVISER NL 2.
Regardless, the revesting of property in the debtor upon confirmation does not
terminate the stay as to actions other than against property of the estate; the
stay of such other acts terminates upon case closure, dismissal, or conversion.
11 U.S.C. §362(c)(2).
Here, the Court need not determine whether and to what extent the
automatic stay terminated upon the effective date of confirmation because it
certainly terminated when the case was first closed on April 30, 2019. As
contemplated by the plan and confirmation order, the Debtors filed a motion to
administratively close their case based on the plan having been substantially
consummated and the estate having been fully administered. The motion did not
ask that the automatic stay remain in force and effect, and it was granted as
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filed. Section 554(c) provides that “[u]nless the court orders otherwise, any
property 	scheduled 	under 	section 	521(a)(1) 	of 	this 	title 	not 	otherwise
administered at the time of the closing of a case is abandoned to the debtor and
administered for purposes of section 350 of this title.” 11 U.S.C. §554(c). Thus,
to the extent any property remained property of the estate following confirmation,
it was no longer property of the estate upon closing of the case. By no later than
April 30, 2019, the automatic stay had terminated entirely.
Before addressing the Debtors’ argument that the plan injunction filled the
gap created upon termination of the §362 stay, the possible existence of a
discharge injunction should be addressed. There is no discharge injunction in
effect here because the Debtors have not received their discharge in the case.
Section 1141(d)(1) generally provides for a debtor’s discharge upon confirmation
of the Chapter 11 plan, but §1141(d)(5) provides that, “[i]n a case in which the
debtor is an individual—(A) unless after notice and a hearing the court orders
otherwise for cause, confirmation of the plan does not discharge any debt
provided for in the plan until the court grants a discharge on completion of all
payments under the plan[.]” 11 U.S.C. §1141(d). Although the Debtors’ plan
suggested 	that 	their 	pre-confirmation 	debts 	would 	be 	discharged 	upon
confirmation per §1141(d)(1), the order confirming plan expressly contemplated
that the Debtors would seek discharge under §1141(d)(5) when eligible. The
discharge language in the plan itself acknowledged that contrary language in the
confirmation order would control, and, in any event, any ambiguity is properly
resolved against the Debtors, as the drafters and proponents of the plan. In re
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Arns, 	372 	B.R. 	876, 	885 	(Bankr. 	N.D. 	Ill. 	2007). 	The 	Debtors’ 	motion 	to
administratively close the case in 2019 further anticipated the case reopening
for the purpose of entering their discharge upon completion of payments under
the plan. No discharge has entered, and as such there is no discharge injunction.
As to whether a plan injunction is in effect that requires FCB to obtain
relief from this Court, the Debtors make the argument without any reference to
specific language or provisions in the plan. The discharge provisions in the plan
do include language purporting to enjoin pre-confirmation claim holders “from
asserting against the Debtors or their assets or property any further or other
claims including claims based on any act or omission, transactions or other
activity of any kind or nature that occurred prior to the Confirmation Date.”
Presumably, this is the language the Debtors were referring to in asserting that
plan 	injunction 	provisions 	required 	FCB 	to 	obtain 	relief 	from 	this 	Court
notwithstanding the termination of the stay under §362. But the plan language,
in the context of the surrounding discharge provisions, is naturally read to mean
that the terms of the confirmed plan replace and supersede all pre-confirmation
or related claims and interests and that claim holders are barred from asserting
or enforcing any right outside of those created by the confirmed plan. If it was
intended that a stay be imposed to bridge the gap between termination of the
automatic stay by operation of law at the time of confirmation or case closure
and the imposition of the discharge injunction upon completion of the plan, the
plan 	provisions 	do 	not 	make 	as 	much 	clear 	and 	therefore 	should 	not 	be
interpreted as doing so. Arns, 372 B.R. at 885; In re Lehman Fin. Group, LLC,
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2006 WL 2640210, at *6 (Bankr. N.D. Ill. Sept. 11, 2006). Nothing in the Debtors’
plan or confirmation order bars FCB from enforcing the terms thereof or the
Debtors’ obligations thereunder.
Having found that there is no stay or relevant injunction in effect, the
remaining question is whether FCB needs to seek any relief from this Court to
enforce the terms of the confirmed plan. “A confirmed plan of reorganization is
in effect a contract between the parties and the terms of the plan describe their
rights and obligations.” Ernst & Young LLP v. Baker O’Neal Holdings, Inc., 304
F.3d 753, 755 (7th Cir. 2002) (citation omitted). Ordinary contract principles and
rules of interpretation apply to confirmed plans, and, accordingly, a post-
confirmation default is treated as any other contractual default enforceable in
any court of competent jurisdiction, including state court. See In re Landreth
Lumber Co., 393 B.R. 200, 205 (Bankr. S.D. Ill. 2008); Matter of Penrod, 169 B.R.
910, 916-17 (Bankr. N.D. Ind. 1994); In re Jordan Mfg. Co., 138 B.R. 30, 38
(Bankr. C.D. Ill. 1992). See also Baggett Bros. Farm, Inc. v. Altha Farmers Coop.,
Inc., 149 So. 3d 717, 718 (Fla. Dist. Ct. App. 2014); In re Metex Mfg. Corp., 510
B.R. 735, 741-42 (Bankr. S.D.N.Y. 2014).
It is of no consequence that the Debtors’ confirmed plan provides for the
bankruptcy court to retain jurisdiction of various matters, including disputes
related to the plan or its enforcement. “Retention by the Bankruptcy Court of
jurisdiction in the case post-confirmation merely continues availability of the
Court as a forum for resolution of questions regarding administration of the plan
and disputes that might arise under it.” In re Ernst, 45 B.R. 700, 702 (Bankr. D.
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Minn. 1985). But “[u]nless the matter at issue is within the exclusive jurisdiction
of the Bankruptcy Court, the mere reservation of jurisdiction in the case by the
Bankruptcy Court post-confirmation does not foreclose the right of a party to
seek his remedy upon default under the plan in a state court having jurisdiction
over the subject matter of the dispute.” Id. Courts widely recognize that state
courts have at least concurrent jurisdiction over issues of plan default or
remedies upon default. Landreth Lumber, 393 B.R. at 205; Wigley v. Lariat Cos.
(In re Wigley), 	624 	B.R. 	861, 	868 	(Bankr. 	D. 	Minn. 	2021); 	Lewis v. Anco
Insulations, Inc. (In re Friede Goldman Halter, Inc.), 602 B.R. 307, 312 (Bankr.
M.D. La. 2019); In re Hunt, 424 B.R. 340, 343 (E.D. Tenn. 2010); Baggett Bros.
Farm, 149 So. 3d at 718 (citing In re Troutman Enters., Inc., 253 B.R. 8, 11 (B.A.P.
6th Cir. 2000), and Paul v. Monts, 906 F.2d 1468, 1476 (10th Cir. 1990)).
Some courts in the Seventh Circuit have suggested that plan defaults and
remedies are properly resolved by the state court rather than the bankruptcy
court. In re Cenergy, 2025 WL 2027524, at *5-7 (Bankr. W.D. Wis. July 18, 2025)
(citing In re T&A Holdings, LLC, 2016 WL 7105903, at *5 (Bankr. N.D. Ill. Nov. 2,
2016) (Bankruptcy courts do not have exclusive jurisdiction over issues of post-
confirmation 	default 	and 	the 	“call 	for 	exercising 	concurrent 	jurisdiction 	is
increasingly tenuous as time passes after confirmation.”)); Jordan Mfg., 138 B.R.
at 36-38 (explaining that aggrieved party may seek dismissal or conversion in
bankruptcy court based on the default or resort to state court for default
remedies under state law); but see In re J&B Haldeman Holdings, LLC, 517 B.R.
910, 	918 	(Bankr. W.D. 	Wis. 	2014) 	(concluding 	that 	bankruptcy 	court 	has
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jurisdictional authority to enforce plan which lapses only after plan has been
fully consummated).
Based on the foregoing, it is clear that FCB’s pursuit of post-confirmation
plan default remedies is not stayed by §362 or any discharge or plan injunction.
Nor is the matter one within this Court’s exclusive jurisdiction. The Motion for
Relief from Automatic Stay and for Abandonment of Property from the Estate is
therefore properly denied as moot.
As part of its Motion, FCB sought a finding that the Debtors were in default
of their obligations under their confirmed plan. The evidence at trial supports a
finding that the Debtors failed to comply with their payment obligations during
the initial 6-year term of the post-confirmation loan entered into by the parties
as contemplated and required by the order confirming the plan. Specifically,
when the 6-year term ended and the note matured on January 1, 2025, the
Debtors had not paid the last three monthly payments thereby relieving FCB of
any obligation to extend the note for an additional 7-year term and triggering the
balloon payment for the balance of the outstanding loan amount. That the
Debtors ultimately paid the amounts owed for the last three months of the initial
loan term does not change the fact that, when the loan term ended on January
1, 2025, they had not complied with their obligations under the note. As of
January 1, 2025, the balance of the debt was owed to FCB, and, having failed to
pay the balance, the Debtors are now in default of that obligation.2
2 The Court makes no findings as to the relief available to FCB or the remedies to which it may be entitled based on
the Debtors’ default. To the extent the Motion for Relief from Automatic Stay seeks other affirmative relief, those
requests are beyond the scope of this Opinion and, in any event, were not among the issues tried before this Court.
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In issuing the decision here, the Court is cognizant of the UST’s pending
motion to convert the case to Chapter 7 and the Debtors’ pending motion to
modify their confirmed plan. Those matters will be taken up in due course. Their
resolution will involve analysis of knotty and somewhat novel legal issues that
go beyond the narrow issue now before the Court. Compare In re Saberioon, 658
B.R. 432, 447 (Bankr. S.D. Tex. 2024) (confirmation of consensual individual
Chapter 11 plan is binding and survives conversion), and In re Aarons, 2023 WL
3918393, 	at 	*6 	(B.A.P. 	9th 	Cir. 	June 	8, 	2023) 	(settlement 	with 	creditor
incorporated into confirmed plan continued to bind after case conversion), with
In re Akamai Physics, Inc., 2022 WL 1195631, at *6-7 (Bankr. D.N.M. Apr. 21,
2022) (individual Chapter 11 “disposable income” plans analogous to Chapter
13 plans and negated by conversion). See also In re Sandford, 498 B.R. 307, 311-
12 (Bankr. D.N.M. 2013) (following reasoning of Seventh Circuit analysis for
Chapter 13 modifications and recognizing the relaxed standard for modification
in individual Chapter 11 cases but ultimately denying modification of individual
Chapter 11 debtor’s plan, noting strong public policy in favor of enforcing
compromises and settlement agreements reached with creditors).
Whether and how the ultimate outcome of those motions might affect
FCB’s rights remains to be seen. But with no stay or injunction now in effect,
the mere possibility of modification or conversion is not a basis to enjoin FCB
from pursuing relief while those other matters are being litigated. See Ernst, 45
B.R. at 704 (court would not enjoin creditor where it did not see substantial
likelihood of successful plan modification). In the meantime, FCB is free to
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enforce the terms of the Debtors’ confirmed plan in any court of competent
jurisdiction.
IV. 	Conclusion
The 	Debtors’ 	Chapter 	11 	plan, 	as 	confirmed, 	contemplated 	post-
confirmation execution of a new note and mortgages in favor of FCB and required
complete compliance with the terms of such note as a condition precedent to
FCB extending the note for a second term. The Debtors unquestionably failed to
timely make payments under the original note term and were in default when
the note matured on January 1, 2025, thus triggering a balloon payment due for
the outstanding balance on the loan. Nearly a year later, the loan balance
remains outstanding. Because the automatic stay is no longer in effect and this
Court does not have exclusive jurisdiction over issues of default on the Debtors’
confirmed plan, FCB is free to pursue its remedies for default in any court of
competent jurisdiction without first obtaining relief from this Court. FCB’s
Motion for Relief from Automatic Stay was not necessary and will therefore be
denied as moot.
This Opinion is to serve as Findings of Fact and Conclusions of Law
pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Order.
ENTERED: December 18, 2025
/s/ Mary P. Gorman
_________________________________________
UNITED STATES BANKRUPTCY JUDGE
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